The economic advantages of stainless steel scrap are significant, with tight supply driving up prices for finished products. [SMM Analysis]

This week, the price of 304 stainless steel scrap off-cuts in east China rose to 9,800-9,900 yuan/mt, while the price in Foshan also increased to 9,600-9,900 yuan/mt. Currently, by raw material, the production cost of stainless steel using only stainless steel scrap is approximately 13,653.95 yuan/mt, and the cost using only high-grade NPI is about 13,870.82 yuan/mt. This week, a steel mill in south China did not update its purchase price for stainless steel scrap.

This week, SS futures stopped falling and began to rebound, driving the stainless steel finished product market. The previously pervasive pessimistic sentiment was somewhat alleviated, and prices also saw a slight increase, with stainless steel scrap prices rising accordingly. Although high-grade NPI prices remain in a downward trend, stainless steel scrap still maintains a significant economic advantage. Meanwhile, the stainless steel production schedule has not shown significant adjustments and continues to remain at a high level, resulting in robust demand for stainless steel scrap and a slightly tight supply in the market. However, it is worth noting that, apart from stainless steel scrap, other stainless steel furnace charges such as high-grade NPI and high-carbon ferrochrome are showing a weakening pullback trend. In this context, steel mills are facing the dilemma of losses due to price-cost inversion. Additionally, the ongoing impact of US tariff policies, combined with macro policy effects, has significantly increased market uncertainty.